Tony the tax...cutter?

Well this was a bit of surprise to see today. Looks like Tony Evers has some tax-cutting plans of his own that goes beyond changing how we fund schools in Wisconsin.

In a brief overview of his plan provided exclusively to the Wisconsin State Journal, Evers said he would pay for most of the $340 million proposal by scaling back a tax credit for manufacturers and agricultural producers.

The proposal calls for tax cuts for individuals making no more than $100,000 a year and families making no more than $150,000.

Under the plan, Evers' campaign said 86 percent of Wisconsin's income tax filers — those below the $100,000 individual or $150,000 family annual income threshold — would see an across-the-board 10 percent cut in the amount of income taxes they pay.

Didn't know he had this up his sleeve.

Evers' plan is a little light on the details on just how those income taxes would be cut and targeted, but the way to pay for them is sensible - stop the Big Giveaway of the Manufacturers and Agriculture Tax Credit for large corporations and rich individuals.

...the manufacturing and agriculture tax credit, which — after being adopted in 2011 and phased in from 2013 to 2016 — has virtually eliminated income tax liability for manufacturers and agricultural producers that claim it. Eligible individuals and businesses may claim the nonrefundable credit for 7.5 percent of eligible income from manufacturing or agricultural production.

Evers' plan calls for capping the credit at $300,000 in annual income. He has called the credit a "handout" for "wealthy corporate interest" while emphasizing nearly 80 percent of its benefit goes to filers, including individuals and businesses, making more than $1 million a year.

The Wisconsin Budget Project has new information on how costly and awful this Giveaway has been, and in addition to the ballooning price tag, MAC has failed miserably at adding jobs in the manufacturing-heavy Wisconsin economy, despite the fact that manufacturing jobs have been growing nationwide.

Companies do not need to create new jobs to claim the credit. Even manufacturers that lay off workers, send jobs overseas, and close factories can receive the credit.

In the wake of the enactment of the credit, the number of manufacturing jobs in Wisconsin has grown more slowly than the national average, and so has the average manufacturing wage. There are many factors that play into those trends, but it’s clear that Wisconsin is not keeping up with national growth in manufacturing. Between March 2013 and March 2018, the number of manufacturing jobs in Wisconsin grew by 4.0%, below the national growth rate of 5.2%. Wisconsin’s average annual pay in manufacturing jobs grew by 1.5% over that period after adjustment for inflation, compared to 3.6% growth in average pay at the national level. Manufacturing workers in Wisconsin earn $9,800 less a year than the national average for manufacturing jobs.

Obviously, a big question is whether there will be enough money to go around from 2019-21 to afford even a revenue-neutral tax cut, given the $1 billion structural deficit that looms. What's a big reason behind these fiscal difficulties? Because of Governor Walker's and WisGOP's pre-election giveaways from earlier this year (remember those? They sure were game-changers, weren't they?), and the hundreds of millions of dollars slated to be given away to Foxconn's construction and first jobs.

There's also the complication that revenue growth will likely slow down in this time period as a recession seems quite likely with the sugar high of the GOP's Tax Scam from DC wearing off, and the hangover of higher interest rates, austerity and overproduction takes hold.

But the Tax Scam also is a good reason to have a targeted tax cut for Wisconsinites in the working to upper-middle classes. Because those individuals are likely to be the ones that will find out that they have to cut a check to the IRS in a few months. Why? Because of the increased $24,000 standard deduction for married couples ($12,000 for single filers).

That number may cut people's overall tax burden, but that's generally happened through lower withholdings already. But that $24,000 total for married individuals also means that it be worthless to take many of the deductions that those individuals are used to taking. This includes:

1. State and Local Tax deduction (SALT) - now limited to $10,000 a return, no matter if that is a single or joint return, and $5,000 if married, filing separately. Given that Wisconsin's tax system relies heavily on income and property taxes, many state residents will hit that limit.

2. Mortgage interest on a primary home.

3. Charitable contributions (although keep it around for state returns).

The possible damage to the housing market is another hit to working and middle-class individuals' pocketbooks (since it's less worthwhile to own a house). So a lot of Wisconsin homeowners will be feeling unexpected financial distress around the time the next state budget is being discussed, and could use a break from what the GOP Tax Scam will put onto us.

From that standpoint, Evers' tax cut proposal is a sensible economic idea, if the money is there to do it and it doesn't endanger the ability to pay for needed services. It's also a good political play because it forces Walker to defend this question.

"Why should we continue to give a free ride to mega-corporations like Kimberly Clark and CAFOs when they just got a massive tax break from Republicans in DC? And why shouldn't those big businesses pay for the infrastructure and services they use more than most people?"

Nice sneak attack Tony. Let's see where it goes, and if you'll get a chance to carry it out.